Prime Minister Brian Cowen said he hoped other orders should follow the Christian Brothers' example. "I would hope that all the remaining congregations would indicate similarly that they are minded to do the same or to make a further important gesture to the victims," he said.

The Ryan Report issued by the Commission to Inquire into Child Abuse has described orphanages and industrial schools in 20th century Ireland as places of fear, neglect and endemic sexual abuse.

The report blasted successive generations of priests, nuns and the Christian Brothers for beating, starving and in some cases, raping, children in Ireland's now defunct network of industrial and reformatory schools.

On Monday, just days after the report's contents stunned the Irish public, the orders dug their heels in and refused to renegotiate a seven-year-old deal.

However, by Tuesday, the Brothers said they would review the compensation. In addition, it said it would carry out a wider review of the entire order saying it had "lost its way and failed in its most basic duty."

The Commission had intended to name the people accused of abusing the children but the Brothers successfully blocked that through legal action.

The revelations of abuse have seriously damaged the Catholic Church's moral authority to a country that once was home to the most religiously devout people in the world.